Fundamentally Unsound

The lack of leadership from the White House is astounding, but this morning President Bush came out of hiding to summarize actions taken in recent weeks by the Federal Reserve and the SEC, and observe that the " the American people are concerned about the situation in our financial markets and our economy." Nothing like a little understatement to start the day.

John McCain has suddenly seen the light, and is now claiming his insistence that the economy is "fundamentally sound" really meant that American workers are the best in the world. And in classic Washington fashion, he offered up the only solution he could think of: appoint a commission to study the problem.

In a stop in Cedar Rapids, McCain even called for the firing of SEC Commissioner Christopher Cox. I actually agree, but McCain conveniently overlooks the fact that Cox was appointed by President Bush because "business interests" were dissatisfied with his predecessor, William Donaldson. I've written on this before (Selling Fannie and Freddie Short ), but Bush was looking for someone who was willing to ignore a few SEC rules here and there, and Cox fit the bill.

McCain isn't saying much about his own role in promoting deregulation over the years. He's apparently forgotten his 1995 push for banking deregulation in 1995, and his claim that regulations were "destroying the American family, the American dream."

He also isn't talking about his vote in favor of the Gramm-Leach-Bliley Act of 1999 (it repealed 1930's legislation that had separated commercial and investment banks) that is directly related to the problems we are having today. This legislation was sponsored by McCain's economic advisor and campaign co-chair, Phil "mental recession" Gramm.

But then it may be hard for someone who claims to be a "maverick" to admit that he voted right along with every other Republican Senator (and not one Democratic Senator) in favor of this legislation. McCain didn't pull the trigger on the financial crisis, but he helped load the gun.

The financial markets are in turmoil, so it's to be expected that presidential candidates will respond to each crisis as it occurs. But what I'd like to hear before going to the polls is an indication that candidates understand the underlying causes, and how the debt we've created by catering to special interests on issues like taxation and spending is part of the problem.

As thing stand, I'm hard pressed to tell much difference between Bush and McCain on most of these issues, and it's clear we need a different kind of leadership.